The Supreme People'S Procuratorate And The Securities And Futures Commission Jointly Implement The "Zero Tolerance" Requirement With A "Three-Dimensional Accountability" System

The combination of administrative law enforcement and judicial, "sword" directly refers to the crime of securities and futures.

On November 6, the China Securities Regulatory Commission (CSRC) and the Supreme People's Procuratorate jointly released 12 typical cases of securities violations and crimes. Typical cases of Xintai Electric's fraudulent issuance, yabaite's financial fraud, and "black mouth" Liao Yingqiang's market manipulation were named.

"In the face of the new situation and new requirements, administrative punishment, as a link in the whole chain of accountability and punishment, is not and should never become the" end point "of the accountability of violators," said Teng Biyan, director of the office of the administrative penalty Committee of the China Securities Regulatory Commission Only in this way can we implement the requirement of "zero tolerance".

Arrest in recent 4 years

302 people were arrested and 342 were prosecuted. In the past four years from 2017 to September this year, the national procuratorial organs have handed over such "lists" in punishing securities and Futures Crimes according to law. Among them, from January to September 2020, the national procuratorial organs approved the arrest of 102 securities and Futures Crimes and the prosecution of 98 people, an increase of 15% and 27% respectively on a year-on-year basis.

Zheng Xinjian, director of the fourth inspection office of the Supreme People's Procuratorate, said that according to the types of securities and Futures Crimes handled by procuratorial organs in recent years, the crimes of insider trading and trading with undisclosed information are relatively more, accounting for 65.7%. However, since this year, the number of criminal cases involving listed companies, such as fraudulent issuance and illegal disclosure, has increased significantly.

In the process of cracking down on the crime of securities and futures, it is crucial to establish a "three-dimensional accountability" system to realize the requirement of "zero tolerance". Visual China

Related securities and futures related products have also begun to develop from stocks and futures to private bonds and options. The crime areas have spread from the main board, gem and SME board to the new third board market. There have even been cross-border and cross market criminal cases. Crimes committed by using new concepts and technologies are also increasing. Among them, those who engage in Securities and futures crimes are mostly securities and futures practitioners, as well as specialized intermediary institutions such as accounting firms, who master professional knowledge.

In addition, according to Zheng Xinjian, in the cases of insider trading and trading with undisclosed information, the information transmitting party and the receiving party usually form an alliance, resulting in the phenomenon of "zero confession". In the cases of manipulating the securities market, some manipulate the accounts of relatives and friends and other illegally obtained accounts, and some rely on asset management plans and special business concealment of specific financial institutions It is difficult to verify the actual controller of the transaction account.

To this end, China Securities Regulatory Commission and the Supreme People's Procuratorate have issued 12 typical cases of securities crimes in recent years, in order to enhance the legal consciousness of all kinds of subjects and investors in the capital market, and prevent and warn illegal crimes.

Among them, six typical cases of securities crime include: xinmou Co., Ltd., Wen Xiaoyi, Liu xsheng fraudulently issuing stocks and disclosing important information illegally; zhongxiaotong Machinery Manufacturing Co., Ltd., Lu Zhaowang and others fraudulently issue bonds, issue certificates with material untruth, and non-state staff bribery; Tang Mou Bo and others manipulate the securities market; Wang, Wang, etc The cases include: the case of trading on the screen and leaking inside information; the case of Hu Mou Fu Trading with undisclosed information; the case of Teng xuxiong and Lin Mou Shan fabricating and disseminating false information of securities trading.

Zheng Xinjian said that in the relevant typical cases, the judicial organs have severely punished some defendants with bad criminal circumstances, serious social harm or refusing to plead guilty, reflecting the judicial policy of zero tolerance and non indulgence in Securities and Futures Crimes.

The six typical cases of securities violation are: the illegal case of information disclosure of yamou Co., Ltd., the case of illegal information disclosure of Huamou Co., Ltd., the case of Liao Xunqiang manipulating the securities market, the case of manipulating the securities market by Tong an investment company, the case of Zhou Mou he's insider trading, and the case of insider trading of Jimou trust company.

Construction of "three dimensional accountability" system

In the process of the joint efforts of administrative law enforcement agencies and judicial organs to crack down on Securities and Futures Crimes, it is crucial to establish a "three-dimensional accountability" system to realize the requirement of "zero tolerance".

The punishment of the Securities Regulatory Commission is not the starting point, but the end point of punishment.

For example, in the above-mentioned six typical cases of securities violation, Ya's financial fraud case will not only face administrative punishment and criminal accountability, but also face huge civil compensation. A company limited by China Securities Regulatory Commission (CSRC) has been subject to several administrative penalties and has been delisted due to its financial indicators touching the relevant provisions of the Listing Rules of the exchange.

"Through the cohesion of administrative law enforcement, criminal justice, civil litigation, self-discipline and punishment, media supervision and other aspects of joint efforts, fully realize the social and legal effects of law enforcement work." Teng Biyan said.

"The cost of breaking the law is not limited to administrative penalties." Liu Junhai, director of the Institute of commercial law of Renmin University of China, also said that in addition to administrative punishment, offenders should bear civil liability, credit liability and even criminal liability according to the nature and circumstances of the illegal act. In order to ensure that civil liability takes root, the new securities law has activated the representative litigation system. In order to sharpen the market's eyes, the new securities law has established the integrity file system of the securities market, improved the system of prohibiting the dishonest from trading securities in the stock exchange and the new third board. "If the circumstances are serious enough to constitute a crime, criminal responsibility shall also be investigated."

In the view of industry insiders, the CSRC's "zero tolerance" attitude towards law enforcement is also reflected in the relevant typical cases.

In the case of illegal information disclosure of a company in China, the CSRC has targeted and intensified the efforts to pursue responsibility for the "key minority" of controlling shareholders, actual controllers and directors and supervisors who manipulate the fraud of listed companies. In the cross-border financial fraud case of a company in ya, the CSRC used the international law enforcement cooperation mechanism to investigate and collect evidence, to curb the listed companies' attempts to evade supervision through overseas business fraud, and investigated the responsibilities of intermediary agencies in accordance with the law while dealing with the listed companies.

According to the introduction of China Securities Regulatory Commission (CSRC), a total of 19.904 billion yuan of punishment has been imposed, and a total of 81.04 billion yuan has been banned from the market.

"To provide a solid back-end law enforcement guarantee for the full implementation of the stock issuance registration system and the improvement of the quality of listed companies through strict law enforcement." Teng Biyan said that in the next step, the CSRC will take the implementation of the new "Securities Law" as an opportunity to continue to carry out the construction of relevant supporting systems such as the identification standard of type cases and the discretion benchmark. At the same time, we should strengthen the punishment of fraud issuance, illegal information disclosure, insider trading, market manipulation and other typical illegal behaviors, further compact the responsibilities of intermediary agencies, and urge them to play a good role as a "gatekeeper" in the market.